The Insurance Council of Australia (ICA) has revised its projection for insurance losses related to extreme weather in 2025, increasing the figure from $3.5 billion to an alarming $4.8 billion. This adjustment reflects not only the rising costs but also the surge in claims being filed.
Particularly devastating was the severe storm and hail event that struck in November, leading to nearly 93,000 insurance claims. The damage from this event alone amounted to $1.78 billion, affecting everything from cars and glass to roofs. Many homes were overwhelmed by stormwater, and numerous trees were uprooted, contributing to the extensive damage.
In contrast, the event known as Alfred, while resulting in a higher number of claims at 133,000, incurred a slightly lower cost of approximately $1.5 billion.
Queensland emerged as a focal point for these costly weather incidents, hosting four of the five most expensive events. Among these, the North Queensland floods and the spring storms in south-east Queensland were particularly damaging, with costs reaching $316 million and $895 million respectively.
“Queensland is no stranger to extreme weather, but experiencing four severe events within a single year is unprecedented,” noted ICA CEO Andrew Hall. He emphasized that many communities are still in the recovery phase from these devastating events.
Hall also highlighted the broader challenges facing the insurance industry, pointing out that ongoing conflicts in the Middle East have created supply chain disruptions and exerted pressure on the construction and transport sectors.
“The reality is, these cost increases will add to the already stubbornly high price to rebuild and repair homes when they are damaged.”
The ICA also found across the country, insurers handled almost six times as many claims from extreme weather in 2025 than the year before, costing $4.8 billion in insured losses and a whopping $8.6 billion when adding the wider economic costs.
The most effective way to protect communities and ease cost pressures is to build the flood levees, dams and other large-scale infrastructure that keep homes and businesses out of harm’s way,” Hall said.
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